SUPPLEMENTARY INFORMATION
STATEMENT OF ADDED VALUE
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
(In US Dollars)
12/31/2015 12/31/2014
GENERATION OF ADDED VALUE
Income
Supply of power 3.291.012.000 3.291.012.000
Remuneration for electricity assignment 313.419.899 318.374.804
Reimbursement of costs - non-bound energy 76.369.446 70.975.712
Sundry income (expenses) (13.374.535) (49.702.979)
3.667.426.810 3.630.659.537
(-) Inputs acquired from third parties
Material 17.170.286 17.901.251
Outsourced services 99.502.987 101.961.380
Other operating expenses 102.112.427 74.912.219
218.785.700 194.774.850
GROSS ADDED VALUE 3.448.641.110 3.435.884.687 (+) Added value received as transfer
Financial income 47.641.371 62.651.745
ADDED VALUE PAYABLE 3.496.282.481 3.498.536.432
DISTRIBUTION OF ADDED VALUE
Remuneration:
Labor
Direct remuneration 236.202.483 294.442.152
Benefits 139.241.005 164.906.101
Post-employment benefits (206.765.665) 123.996.093
Labor indemnities (29.984.715) 51.200.778
FGTS 5.182.175 6.920.204
143.875.283 641.465.328
Government
INSS and IPS 31.202.978 40.033.054
SUPPLEMENTARY INFORMATION
STATEMENT OF ADDED VALUE
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
(In US Dollars)
12/31/2015 12/31/2014
Remuneration for electricity assignment 313.419.899 318.374.804
811.923.167 835.612.524
Third-party capital
Debt charges 804.342.107 885.738.220
Monetary variations (387.011.257) (55.735.307)
Other financial expenses 4.213.780 2.145.628
421.544.630 832.148.541
Own capital
Yields from Capital 47.119.450 48.784.814
Reimbursement management and supervision
charges 35.946.176 36.708.052
83.065.626 85.492.866
Income (loss) for the year 2.035.873.775 1.103.817.173
DISTRIBUTED ADDED VALUE 3.496.282.481 3.498.536.432
SUPPLEMENTARY INFORMATION
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
(In US Dollars)
12/31/2015 12/31/2014
FROM OPERATING ACTIVITIES
Income (loss) for the year 2.035.873.775 1.103.817.173
Adjustments of income (loss)
Writes-off of fixed assets 18.017.405 58.155.422
Monetary restatements - loans (7.185.542) (1.927.269) Monetary restatements - estimated obligations (452.623.672) (70.503.142)
Liability provisions
Financial charges - loans 804.470.151 885.768.845
Estimated obligations (248.612.880) 69.969.179 Adjusted income (loss) 2.149.939.237 2.045.280.208
Changes in assets and liabilities
Changes in trade accounts receivable 40.140.941 16.490.493
Changes in storeroom (188.172) 164.362 Changes in other receivables 3.058.047 14.326.704 Changes in remuneration and reimbursements (67.921.175) (28.882.569) Changes in suppliers and other liabilities (3.722.941) (2.475.056) Changes in salaries and social security charges (14.587.157) 4.001.555 Changes in estimated obligations (46.072.732) (34.155.277)
(89.293.189) (30.529.788)
Net operating cash flow 2.060.646.048 2.014.750.420
FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment and
intangible assets (25.635.436) (41.455.814)
Cash and cash equivalents in investment activities (25.635.436) (41.455.814)
SUPPLEMENTARY INFORMATION
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
(In US Dollars)
12/31/2015 12/31/2014
Loans and financing obtained 11.132.250 8.660.000 Amortization of loans and financing (1.251.215.806) (1.168.196.548) Payment of interest on loans and financing (805.934.091) (887.172.620)
Cash and cash equivalents in financing activities (2.046.017.647) (2.046.709.168)
TOTAL EFFECTS ON CASH AND CASH EQUIVALENTS (11.007.035) (73.414.562)
Cash and cash equivalents at the beginning of the period 313.950.465 387.365.027 Cash and cash equivalents at the end of the period 302.943.430 313.950.465 Changes in cash and cash equivalents (11.007.035) (73.414.562)
SUPPLEMENTARY INFORMATION
STATEMENT OF OPERATING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
(In US Dollars)
12/31/2015 12/31/2014
INCOME
Income from contracts for the provision of
electricity services:
Brazilian purchasing entity
2.965.537.354
2.994.640.753 Paraguayan purchasing entity
325.474.646
296.371.247 Remuneration for electricity assignment
313.419.899
318.374.804 Reimbursement of costs - non-bound energy
76.369.446
70.975.712 Total income
3.680.801.345
3.680.362.516
LESS:
REMUNERATION FOR ELECTRICITY ASSIGNMENT
(313.419.899) (318.374.804)
COST OF ELECTRICITY SERVICE
Remuneration and reimbursement to the High
Contracting Parties
and the Parties that constitute ITAIPU:
Yields from Capital
(47.119.450)
(48.784.814)
Bound energy
Royalties
(396.385.804)
(411.298.648)
Reimbursement of management and supervision
charges
(30.491.216)
(31.638.358)
(426.877.020)
(442.937.006)
Non-bound energy
Royalties
(70.914.486)
(65.906.018) Reimbursement of management and supervision
SUPPLEMENTARY INFORMATION
STATEMENT OF OPERATING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
(In US Dollars)
12/31/2015 12/31/2014
(76.369.446)
(70.975.712)
(550.365.916)
(562.697.532)
Amortization of loans and financing (1.240.044.934)
(1.166.850.726)
Financial charges on loans and financing
(804.669.091)
(885.947.292)
Exploration expenses
Personnel
(448.700.507)
(557.907.730)
Machinery and equipment
(27.549.342)
(35.185.523)
Outsourced services
(101.653.126)
(113.380.027)
Other exploration expenses
(88.903.536)
(96.886.045)
(666.806.511)
(803.359.325)
Total cost of electricity service (3.261.886.452)
(3.418.854.875)
OPERATING ACCOUNT RESULTS FOR THE FINANCIAL
YEAR
105.494.994
(56.867.163)
Prior year balance
(75.147.151)
(170.207.551)
Financial income and Sundry
6.743.625
151.927.563
ACCUMULATED INCOME (LOSS) FROM OPERATING
ACCOUNT
37.091.468
(75.147.151)
ATTACHMENT I
NOTES OF THE STATEMENTS OF THE OPERATING ACCOUNTS AS OF DECEMBER 31, 2015 AND 2014
Attachment "C" of the Treaty of ITAIPU, Financial Bases and Provision of Electricity Services, states that the Operating Account is represented by the annual balance between Income and the Electricity Service Cost, calculated according to the following criteria:
a) Income
This arises from the provision of electricity services, through a Letter of Commitment signed with Centrais Elétricas Brasileiras S.A. - ELETROBRAS, Brazil, and Letter of Agreement signed with Administración Nacional de Electricidad - ANDE, in Paraguay, according to item IV of Attachment "C" of the Treaty, the Electricity Service Cost must be the same each year.
The Board of Directors of ITAIPU fix the unit cost of the electricity service as per the conditions set out in the signed documents.
b) Cost of Electricity Service
According to the item III of Attachment "C" of the Treaty and the Notes 3 and 4 of January 28, 1986, and 10 of November 13, 2000, exchanged between the Brazilian and Paraguayan Ministries of Foreign Affairs, the Electricity Service Cost consists of the following items:
- Remuneration and reimbursements to the High Contracting Parties and the Parties that constitute ITAIPU, as follows:
Yields from capital - calculated at the equivalent of 12% per year on the participation of Centrais Elétricas Brasileiras S.A. - ELETROBRAS and the Administración Nacional de Electricidad - ANDE of the paid capital. From January 2001, these were updated according to Note 10 of November 13, 2000.
Royalties - Calculated at the equivalent of 650 United States Dollars per gigawatt hours generated and measured in Hydroelectric Power Plant, and should not be less than 18 million Dollars per year, at the rate of half to each High Contracting Party.
Reimbursement of Management and Supervision Charges - Calculated at the equivalent of 50 United States Dollars per gigawatt hours generated and measured in Hydroelectric Power Plant, due in equal parts to Centrais Elétricas Brasileiras S.A. - ELETROBRAS and Administración Nacional de Electricidad - ANDE
Remuneration for electricity assignment - Calculated at the equivalent of 300 United States Dollars per gigawatt hours generated, transferred to the other High Contracting Party.
The Notes 3 and 4, both of January 28, 1986, exchanged between the Brazilian and Paraguayan Ministries of Foreign Affairs, provide that the amount of compensation will be included only in the rate to be paid by the Party that consumes the ceded energy.
The values of the royalties, the Reimbursement of Management and Supervision Charges and remuneration for electricity assignment, calculated in accordance with the above, were multiplied, from the financial year of 1992, by a factor of 4.00 (four whole) where from 2006, according to the agreement in the exchange of Notes between the two governments, Brazilian and Paraguayan, on December 8, 2005, was established in item III. 8 of Attachment "C" of the Treaty for remuneration for electricity assignment are to be multiplied by a factor of 5.10 (five whole and one- tenth).
From May 14, 2011, as agreed by the Notes signed, on September 1, 2009, between the Government of the Federative Republic of Brazil, promulgated by Decree Number 7,506 of June 27, 2011, and the Government of the Republic Paraguay, approved by Law Number 3,923, of November 18, 2009, the multiplying factor of compensation for energy from ITAIPU ceded to Brazil, paid to the Government of the Republic of Paraguay, went from 5.10 (five whole and one-tenth) to 15,30 (fifteen whole and three-tenths).
These costs will be kept constant as per the formula set out in Note 3, according to the following adjustment factors:
Year Original factor
Adjustment factor
Adjusted factor
( A ) ( B ) * ( A x B )
1985 3.50 - -
1986 3.50 - -
1987 3.58 103.161 369.316
1988 3.66 107.050 391.803
1989 3.74 112.344 420.167
1990 3.82 117.452 448.667
1991 3.90 120.367 469.431
1992 4.00 122.699 490.796
1993 4.00 125.442 501.768
1994 4.00 127.941 511.764
1995 4.00 132.219 528.876
1996 4.00 135.174 540.696
1997 4.00 137.073 548.292
1998 4.00 136.668 546.672
1999 4.00 139.071 556.284
2000 4.00 145.725 582.900
2001 4.00 148.488 593.952
2002 4.00 148.082 592.328
2003 4.00 153.284 613.136
2004 4.00 159.690 638.760
2005 4.00 168.959 675.836
2006 4.00 176.153 704.610
2006 5.10 176.153 898.378
2007 4.00 181.921 727.684
2007 5.10 181.921 927.797
2008 4.00 194.133 776.534
2008 5.10 194.133 990.080
2009 4.00 185.365 741.460
2009 5.10 185.365 945.362
2010 4.00 193.060 772.240
2010 5.10 193.060 984.606
2011 4.00 203.768 815.072
Jan-May 2011 5.10 203.768 1.039.217
May-Dec 2011 15.30 203.768 3.117.650
2012 4.00 205.866 823.464
2012 15.30 205.866 3.149.750
2013 4.00 207.836 831.344
2013 15.30 207.836 3.179.891
2014 4.00 210.189 840.756
2014 15.30 210.189 3.215.892
2015 4.00 203.094 812.376
2015 15.30 203.094 3.107.338
(*) Base: annual average inflation rate observed in the United States, using the indexes
"Industrial Goods" and "Consumer Prices" published in the journal of "International Financial Statistics".
- Amortization of loans and financing: This refers to contractual obligations amortized in the financial year, with companies and financial institutions in Brazil and other countries.
- Financial charges on loans and financing: These represent the amounts of charges paid to companies and financial institutions in Brazil and abroad, incurred up to the date of the balance sheet.
From the financial year of 2012, amortizations and payments of charges on loans of CAJUBI are not included in the Operating Account, relating to contracts PIB 2010-10-0001 and PIB 2012-10-0001, as these amounts are reimbursed to ITAIPU by ANDE, as provided in addition 2 of the Convention 5,808/99.
From the financial year of 2014, amortizations and payments of charges of Banco ITAU Paraguai are not included in the Operating Account, contracted for the execution of works and services to strengthen the electrical system in the Department of Alto Parana, Paraguay as Executive Board Resolution Number RDE- 076/14 and Board of Directors’ Resolution Number RCA-013/14.
- Exploration expenses: These consist of all expenses attributable to the provision of electricity services, including direct costs of operation and maintenance, in addition to replacements caused by normal wear and tear of equipment, insurance, administration, and overheads.
- Accumulated results of the Operating Account: Comprises the result, profit or loss, of the Operating Account for the financial year, plus or minus the balance of the previous year.
* * * * * * * *